The Internet of Things for the Rest of Us

Mainstream customers are missing participants in the growing conversation around the Internet of Things (IoT), but they are not the only missing voices. Legacy brands (i.e. those brands that you have in your home and recognize on store shelves) are largely absent as well. Typically legacy brands are category leaders. They are not known for their early adoption of emerging technology or for becoming change agents in their own markets. This is striking because they are vulnerable to new market entrants. As the IoT economy matures, legacy brands find themselves in the crosshairs of disruptors and they are often ill-equipped to defend their position against newcomers.

In 2015, media outlets will be inundated by two sides of a self-serving debate; namely, which big internet company’s home automation platform is winning the battle for the IoT, and which smart devices will serve up consumer data to each respective platform. The most troubling aspect of this debate is that it was manufactured in the echo chamber of big home automation players and presumes that there is only one way to participate in the growing IoT economy. Newcomers to the IoT space are forewarned that if their solution doesn’t aggregate into a big, home automation offering or pass their data to a particular smartphone service, the result will be a fragmented world of products jockeying for superior wireless connections and a deluge of push notifications that will interrupt users’ binge-streaming of Modern Family.

It would be better for everyone, they argue, if the flood of Bluetooth Low-Energy (BTLE) enabled wearable tech that tracks and monitors its users, only aggregates the data for the benefit of a company the user may not know or trust. Not playing ball they warn, will culminate in a dystopia of smart toasters unable to reach out and touch each other unless they connect to a “one-ring-to-rule-them all” protocol.

However, the dominant paradigm about how the battle for the IoT is about to be subverted. Another approach is emerging among a handful of small start-ups, legacy brands and their customers. Together, these groups are asking, “what about the rest of us?”

It’s the Majority, Stupid

The problem with the IoT has been difficult for non-technical consumers to participate. Even for the most eager innovators and early adopters, the IoT has be a hodgepodge of after market wall-warts, stand-alone hub systems or DIY kits that would confound Inspector Gadget. Efforts around IoT product safety and security continue to be ambiguous at best and hazardous at worst; it’s ok if your light bulbs turn on when you’re not at home, but not your oven. Similarly, commercial IoT efforts have been focused on this same, disillusioned sliver of audience and have ignored or failed to reach mainstream customers. These are either priced out of reach of average customers or are being marketed by brands that customers don’t know or trust.

A few IoT solutions have made it into popular consciousness, but they were quickly gobbled up by large Internet companies. Stand-alone hub solutions have been outwardly rejected by the majority of customers and these offerings are either withering on the vine or have been acquired.

In “Crossing the Chasm,” Geoffrey Moore offered an outline that predicted why early IoT efforts have failed. Like all new technologies, the IoT will have to run the gauntlet of the technology adoption life cycle curve before the majority of customers will trust (and purchase) IoT solutions.

Mainstream customers have thus far been sidelined in this conversation. Stop for a minute and ask your parents, friends, or neighbors if they know what the IoT is - go ahead, we’ll wait. Our guess would be that they either have a) no idea what you were talking about or, b) they gave an indecipherable explanation worthy of an SNL skit. When prompted, we bet that they are aware of some IoT devices, like thermostats and fitness trackers, but the safe money is that they don’t have a clue.

Most existing brands have the manufacturing know-how, historical distribution channels and loyal customer bases to introduce new products, but they may not have infrastructure to develop sophisticated IoT products. Instead, they are following rather than leading in the emerging IoT economy. Alone, they can’t compete against nimble disruptors and startups – let alone pivot into becoming a technology company. Once a disruptor enters their categories, it can take upwards of two years for a legacy brand to respond to their shiny new competition. Like mainstream customers, legacy brands will play an important role in the developing economics of the IoT, but up until now, there has not been a way for them to do so quickly, easily and confidently.

One Feature at a Time, One Brand at a Time

The solution for legacy brands and their customers may be found in partnering with Product as a Service (PaaS) solutions and developing hybrid, co-branded products. A successful transition into the IoT may be more evolutionary than revolutionary. Clearly, the early race for home automation superiority has demonstrated that there is no unicorn hub or platform that will satisfy all customers, so a hybrid approach that gradually transforms each segment may be the way forward.

Legacy brands have the power and reach to create a sea change in the way we think about IoT products. By slowly enhancing the feature sets of existing products that customers already know and love, legacy brands can get a foothold in the IoT space. By building the products that they already know how to build and integrating them with PaaS solutions, legacy brands can disrupt their own segments and accelerate their time to market. This hybrid approach will augment the existing technical credibility of legacy brands and create a value-added proposition to their customers.

When correctly utilizing the IoT, brands will have more access to their customers than ever before. They will be able to manage and measure their client interactions, improve their customer service and engage proactively when appropriate. Legacy brands will have improved product safety and monitoring capabilities and be able to alert users and shut down before a negative event occurs. But most importantly, customer data will reside with the brands – not some faceless data company, and the product safety and warranty protections customers have grown to expect will be in the hands of trusted brand partners.

Brands must mind the gap into the IoT. Customers will be more likely to upgrade an existing experience with a trusted brand in order to receive the benefit of a connected device as long as there is no headache involved, no extra hardware to buy or configure and a low technology bar to hurdle. For the IoT to gain mainstream acceptance and adoption, we have to break the paradigm that it’s a “winner take all” scenario and accept that’s it’s ok if there’s no “Lingua Franca” out of the gate. There’s plenty of evidence that mainstream adoption of the IoT will occur in fits and starts. #Winning the IoT will be about engaging customers through the legacy brands that they know and trust.

This article was authored by Thomas Worley and Frank D’Andrea. Thomas Worley is founder and CEO of DADO Labs and Frank D’Andrea is the Vice President of Software and Business Development of DADO Labs.